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Ninth Circuit Affirms Dismissal of Measure 49 Constitutional Challenges

In its January 12, 2012 opinion in Bowers v. Whitman, the Ninth Circuit Court of Appeals concluded that the State of Oregon (and Jackson County) did not violate Plaintiffs' property rights under the takings, due process, and equal protection clauses of the United States Constitution when the State modified the remedies available under Ballot Measure 37 through the enactment of Ballot Measure 49 (now codified as ORS 195.300 to 195.336). The Court held that any potential property interest the Plaintiffs had for compensation or for a specific type of land use based on their Measure 37 waivers had not vested, and therefore was not protected by the Fifth and Fourteenth Amendments.

The Plaintiffs in these consolidated cases were real property owners who each submitted written demands for compensation under Measure 37 and received timely waivers (which rolled back the regulations applicable to their property to those in effect when they became owners) in lieu of payment of public funds. Thus, none of the plaintiffs had recovered monetary compensation, and after the subsequent enactment of Measure 49 without there having been any development on those properties, none were able to proceed with development of their land under the waivers. Plaintiffs’ claims asserted, in pertinent part, that pursuant to Measure 37, they had gained an “accrued cause of action” for monetary compensation, which was a property interest protected by the Fifth Amendment (Takings Clause) of the United States Constitution, so that enforcement of Measure 49 resulted in an unconstitutional taking. Some of the plaintiffs also alleged that Measure 49 violated substantive due process and equal protection guarantees under the 14th Amendment. The claims were dismissed by the Oregon federal district court on summary judgment.

With respect to the claimed takings, the Ninth Circuit’s analysis focused on the critical issue of whether Plaintiffs' Measure 37 property interests had vested such that Oregon could not remove or modify the right without committing a constitutional taking. To determine whether a property interest has vested for purposes of a constitutional taking, the relevant inquiry is the certainty of one's expectation in the property interest at issue. The Ninth Circuit rejected each of the Plaintiffs' arguments in this case with respect to the Measure 37 waivers as vested property interests.

First, the Ninth Circuit reaffirmed that an accrued cause of action is not a vested property interest for Takings Clause purposes until it results in an unreviewable final judgment. Because the waivers are administrative decisions, not court judgments, Plaintiffs merely had a cause of action to enforce the waiver, not a final judgment. Next, the Ninth Circuit rejected Plaintiffs' claim that their Measure 37 waivers constituted vested statutory entitlement to compensation, holding that the Plaintiffs' claim to compensation were more akin to social security benefits: something that the government voluntarily provides, but that the government can stop providing at any time (assuming compliance with procedural due process, which was not an issue in Bowers). Finally, the court held that the Plaintiffs had not exhausted all available alternative remedies under Measure 49 to determine which land use options were available to them, and had not sought to determine whether their right to develop their land pursuant to the Measure 37 waivers vested in equity pursuant to the factors prescribed by the Oregon Supreme Court in Clackamas County v. Holmes, 265 Or 193 (1973). Accordingly, their claims were not ripe. The court further held that even if ripe, without a showing of detrimental reliance on the waivers, it is unlikely Plaintiffs' interest in a particular land use had vested in equity. Accordingly, there was no constitutional taking of Plaintiffs' property rights as a result of Measure 49.

The Ninth Circuit also held that Measure 49 does not contravene substantive due process rights because it does not implicate fundamental rights. Furthermore, for this reason, and because the regulatory classification under Measure 49 is not based on a suspect class, Measure 49 also survives rational basis scrutiny under an equal protection analysis.

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